Winbond posts second consecutive annual loss

ROSIER FUTURE:：The company, which lost NT$1.85bn, said it expects smartphones, tablets and LCD TV’s to trigger NAND flash demand in the second half of this year

By Kevin Chen / Staff reporter

Thu, Feb 07, 2013 - Page 14

Memorychip maker Winbond Electronics Corp (華邦電子) yesterday reported a loss for a second consecutive year, as the company continued adjusting its product mix amid falling average selling prices and a low utilization rate due to slack global demand for PCs.

The Hsinchu-based company last year incurred a net loss of NT$1.85 billion (US$62.5 million), or a net loss of NT$0.5 per share, widening from the previous year’s net loss of NT$843.29 million, or NT$0.23 per share.

In the October-to-December quarter alone, Winbond posted a net loss of NT$556 million, which was larger than a net loss of NT$324.79 million in the previous quarter and compared with a net loss of NT$1.19 billion in the same period of 2011.

Last quarter’s figure marked the company’s sixth consecutive quarterly loss since Winbond reported a net profit of NT$269.36 million in the second quarter of 2011, the company’s financial statement showed.

The loss per share was NT$0.15 last quarter, compared with a loss per share of NT$0.35 in the prior quarter and NT$0.32 in the fourth quarter of 2011.

Revenue was NT$6.236 billion, down 5.21 percent quarter-on-quarter, but up 9.08 percent year-on-year.

Gross margin declined to 8.24 percent last quarter from 10.55 percent in the previous quarter, but it was much better than the minus-1.7 percent posted in the fourth quarter of 2011.

For this year, the company said it is optimistic about its NOR flash chip business on growing demand for handheld devices, but forecast price dynamics in the specialty DRAM sector would lag behind the PC DRAM sector due to the nature of the business of its tier-1 customers.

Winbond said it would also continue its transition in the mobile RAM sector and focus more on low-power DRAM products for peripheral module products and handheld devices instead of pseudo-RAM products.

“The low-power [DRAM] business will warm up in the second half and show strong growth next year,” it said in the statement.

“Smartphones, tablets, LCD TVs and networking applications will trigger NAND flash demand in the second half of this year,” Winbond said, adding that medium and low-density memory chips used in peripheral modules pose key opportunities for the company.

The company forecast that the feature phone market would continue to shrink and it expects ongoing DRAM industry consolidation to lead to a more stable and healthy market this year.

However, due to still weak market conditions, Winbond substantially adjusted downward its forecast for capital expenditure this year by 78 percent to NT$664 million from NT$3 billion last year, while it plans to spend only NT$190 million next year, Winbond vice president James Wen (溫堅) said in a filing to the Taiwan Stock Exchange yesterday.

Ahead of the release of the firm’s results, Winbond shares rose 0.68 percent on the local bourse to close at NT$5.92.

The shares have risen 7.83 percent over the past 12 months, outperforming the TAIEX, which rose 2.84 percent over the same period.